Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.
Is The Men’s Wearhouse, Inc. (NYSE:MW) a buy right now? The smart money is buying. The number of bullish hedge fund bets advanced by 6 lately. At the end of this article we will also compare MW to other stocks including GrubHub Inc (NYSE:GRUB), La Quinta Holdings Inc (NYSE:LQ), and BGC Partners, Inc. (NASDAQ:BGCP) to get a better sense of its popularity.
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Keeping this in mind, let’s view the latest action regarding The Men’s Wearhouse, Inc. (NYSE:MW).
How are hedge funds trading The Men’s Wearhouse, Inc. (NYSE:MW)?
At the end of the third quarter, a total of 39 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Eminence Capital, managed by Ricky Sandler, holds the most valuable position in The Men’s Wearhouse, Inc. (NYSE:MW). Eminence Capital has a $169.1 million position in the stock, comprising 2.6% of its 13F portfolio. The second largest stake is held by LionEye Capital Management, managed by Stephen V. Raneri, which holds a $106.7 million position; the fund has 4.4% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish consist of Robert Pohly’s Samlyn Capital, and Jason Karp’s Tourbillon Capital Partners.
Now, specific money managers were breaking ground themselves. Gotham Asset Management, managed by Joel Greenblatt, initiated the most outsized position in The Men’s Wearhouse, Inc. (NYSE:MW). Gotham Asset Management had $25.3 million invested in the company at the end of the quarter. David Keidan’s Buckingham Capital Management also made a $20.8 million investment in the stock during the quarter. The other funds with brand new MW positions are Jim Simons’s Renaissance Technologies, Matthew Taylor and Ty Popplewell’s Kortright Capital Partners, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s now review hedge fund activity in other stocks similar to The Men’s Wearhouse, Inc. (NYSE:MW). We will take a look at GrubHub Inc (NYSE:GRUB), La Quinta Holdings Inc (NYSE:LQ), BGC Partners, Inc. (NASDAQ:BGCP), and Gold Fields Limited (ADR) (NYSE:GFI). This group of stocks’ market valuations resemble MW’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GRUB | 24 | 467061 | -7 |
| LQ | 24 | 318895 | -5 |
| BGCP | 18 | 128405 | 2 |
| GFI | 16 | 165266 | 0 |
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $270 million. That figure was $776 million in MW’s case. GrubHub Inc (NYSE:GRUB) is the most popular stock in this table. On the other hand Gold Fields Limited (ADR) (NYSE:GFI) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks The Men’s Wearhouse, Inc. (NYSE:MW) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
